French second homes: tax-exemption time for capital gains may be reduced

French MPs have voted to reduce the amount of time that a second home must have been owned in order for its sale to be exempt from capital gains tax by five years, in a bid to improve the fluidity of the housing market in high-demand areas.

The Assemblée nationale adopted an amendment to the 2026 budget’s projet de loi de finances (PLF) on November 3. If it comes into law, the amendment will reduce the time required to be exempt from impôt sur la plus-value de cession by five years.

What are the rules on capital gains on second homes in France?

In France, homes that you use as your main residence are exempt from capital gains tax and social charges, regardless of the time between purchase and sale, although there are proposals to bring in an amendment to this in certain circumstances.

However, homes that are not your main residence are subject to capital gains tax, if less than 22 years have passed between purchase and sale. 

After 22 years, owners are 100% exempt from capital gains tax, but must still pay social charges if the property is sold during the 23rd to 30th year of ownership. If it is sold after 30 years, owners are exempt from 100% of capital gains tax and social charges. 

The taxable/chargeable capital gain and social charges are subject to gradually-reducing percentages, before complete exemption after 30 years. Read our guide to these percentages, with an example of how to calculate rates, here.

‘Not revolutionary, but positive’

The need to wait 22 years means that second homes may sometimes sit empty or barely used, while the owner waits for this period to elapse before selling.

“This poses a real problem for the fluidity of the property market in markets such as mine, where demand for housing is high,” said Corentin Le Fur MP (Côtes-d'Armor), during the Assemblée’s public debate session on the bill. 

Although he said that the amendment was “not revolutionary” – as it would only reduce the time for exemption by five years, from 22 to 17 – he said even a five-year reduction was positive.

It will “speed up the sale of second homes likely to become primary residences” for buyers “in areas where the property market is extremely tight” [ie. where demand for housing far exceeds supply], he said. 

Homes that sit empty in France have long been controversial and subject to specific taxes, particularly in zones tendues (high-tension areas), and tourist areas that have seen increasing numbers of short-term holiday rentals in recent years.

Criticism and debate

Minister of Public Accounts Amélie de Montchalin said she was opposed to the amendment due to a “lack of transition phase” for its introduction. Yet, the Assemblée’s general rapporteur for the budget, Philippe Juvin, said he was “personally” in favour. 

The new amendment has not yet come into force; it will still need to be voted through with the rest of the PLF before 2025. Discussions on the draft budget are continuing.

MPs also voted, on the same date, for an amendment to raise the tax-free allowance for inheritance tax for stepchildren.